Screening Filters
Market Cap ≥ $10B (market_cap: {'min': '10000000000'})
- Purpose: Focus on larger, more established companies.
- Rationale: For a generic “stock to buy” recommendation (without specifying risk appetite or niche themes), large-cap stocks tend to be more stable, more liquid, and better covered by analysts. This reduces idiosyncratic risk compared with small, speculative names.
Return on Equity ≥ 12% (return_on_equity: {'min': '12'})
- Purpose: Ensure we are looking at companies that generate attractive returns on shareholders’ capital.
- Rationale: ROE is a quality and profitability metric. A threshold of 12% filters out many low-quality or structurally weak businesses and focuses on companies that historically have deployed capital efficiently, which is desirable for a potential long-term holding.
Debt-to-Equity ≤ 1 (debt_equity: {'max': '1'})
- Purpose: Limit financial risk by avoiding highly leveraged companies.
- Rationale: A D/E ratio below 1 suggests that a company is not over-reliant on debt financing. This typically makes earnings more resilient in downturns and reduces the risk of distress from rising interest rates or tightening credit conditions—important for someone looking for a relatively sound purchase candidate.
5-Year EPS CAGR ≥ 8% (eps_5yr_cagr: {'min': '8'})
- Purpose: Require a history of consistent earnings growth.
- Rationale: An 8%+ compounded annual growth rate in earnings per share over five years indicates that the business isn’t just stable, but is actually growing at a healthy pace. This aligns with the idea of buying companies with expanding profits, which supports future stock price appreciation and/or dividend growth.
P/E (TTM) between 10 and 30 (pe_ttm: {'min': '10', 'max': '30'})
- Purpose: Avoid both extremely cheap (potentially distressed) and extremely expensive (possibly overhyped) valuations.
- Rationale:
- A minimum of 10 screens out some very low P/E stocks that may be “value traps” (cheap for a reason, e.g., severe structural issues).
- A maximum of 30 avoids the highest-multiple growth names where expectations are very high and downside can be significant if growth slows.
- The 10–30 band is a moderate valuation range that often corresponds to reasonable quality and growth expectations.
Why Results Match the User’s Request
- The filters prioritize quality (high ROE), financial strength (reasonable leverage), and demonstrated growth (solid EPS growth history), which are core criteria when shortlisting candidates to “buy.”
- By focusing on large caps and moderate valuations, the screener aims to identify stocks that balance growth potential with risk control, aligning with a general request for a stock recommendation suitable for many investors rather than speculative trades.
This list is generated based on data from one or more third party data providers. It is provided for informational purposes only by Intellectia.AI, and is not investment advice or a recommendation. Intellectia does not make any warranty or guarantee relating to the accuracy, timeliness or completeness of any third-party information, and the provision of this information does not constitute a recommendation.